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TMT Weekly: CHTR, GOOGL and Fear of Fixed Wireless

Austin Moorhead | September 02, 2022

Last week’s post featured an expert discussing fixed wireless in relation to CHTR, and I just went along with the bull case. One of our clients responded with an email outlining the bear case, which was really cool. It’s not every day that a portfolio manager emails me to explain why I’m probably wrong about something. By probably, I mean like 99% chance that I’m wrong, but I’m not yielding that 1% yet, not even to a Tiger cub. 

I’ll admit I’m intimidated to attempt to do the work of a public equities analyst. In fact, I think I’ve been using humor to mask that fear. I must not fear. Fear is the mind killer. I will face my fear of fixed wireless… 

Top 10 Weekly Transcripts in TMT by Unique Users

# Ticker Title
1 CHTR Former Executive Believes That Cable Companies Are the Best Suitable Option to Add Broadband Capacity
2 META Customer Believes That Clients Reduced META Budgets Due to Privacy Changes With iOS14
3 SNOW Partner Thinks Value Received From SNOW Justifies the Cost
4 SPOT Former Sr. Unit Head Thinks Labels Are in a Strong Spot for the Foreseeable Future
5 PYPL Former COS Is Positive on PYPL Looking Forward
6 GOOGL Former Strategic Partner Manager Believes GOOGL TikTok and Store Advertisers Are Positioned Well for the Near-Term
7 GOOGL Competitor Believes There Is a Large Need for Cloud-Based AI Solutions in Healthcare but Thinks on-Prem Will Have Advantages in the Clinic
8 GOOGL Customer Believes GOOGL Will Find a Way to Benefit From Any Changes to the Cookie Policy Currently Planned for the End of 2024
9 INTU Former SVP Thinks INTU Is Really Good at Learning From Mistakes
10 GOOGL Industry Expert Thinks GOOGL Has Moved Beyond Ranking Pages Based on Traditional SEO Strategies

Well, here we go. CHTR at #1. The most-read expert’s background, in his own words:

“I was responsible for rebuilding and upgrading networks in about 60% of Charter’s footprint over a period of five years.”

Charter Communications – Senior Director, Network Engineering (Prior)

That sounds credible. He echoes the bear case (I’m paraphrasing our client here): wireless companies make more money on out-of-home data, so they don’t really want to clog their networks with fixed wireless.

“For fixed wireless to increase its bandwidth, it’s got to increase its number of distribution points. It’s got to build a very dense infrastructure of wireless towers. Some might be stranded on it or a full tractor but it still needs to backhaul all of that to its Internet meeting points and hand-off points. It might not have to do the last quarter mile.

The last quarter mile is all that the cable company has really in its coaxial network. The rest is all fiber distribution network. These wireless companies are going to build that same infrastructure. They’re going to have to get the pole permits. They’re going to have to string fiber or they’re going to have to buy bandwidth from the incumbents at a wholesale level.

It’s no secret that Verizon bought a lot of its transport for its homes between towers from Charter, and Time Warner before that. In fact, I thought that Verizon might have purchased a cable company just to get that infrastructure. It didn’t happen. I’m not sure if it might still happen, but that would be very attractive.”

Charter Communications – Senior Director, Network Engineering (Prior)

One useful exercise would be to determine the cost for VZ of buying that network access wholesale, building it themselves, or acquiring a cable company. This expert can help fill in some of the assumptions in that model:

“In the past, cable companies traded as high as $2,000-$3000 per customer. The average cable company has about 60% penetration, 50%-60%. For homes passed, you take 2/3 of that number per homes passed. If it were $3,000 per customer, it might be $2,000 per home passed. By home passed, means you have the cable out and front in the street and you just have to spend a couple hundred dollars to run the cable into the house.

To build a cable network, maybe you’re spending $1,200 per home passed with traditional coax and maybe it’s only $1,000. To build fiber into a home, it’s cheaper to build fiber down the street into a home than it is to build a hybrid fiber coax network.”

Charter Communications – Senior Director, Network Engineering (Prior)

Understanding the fixed wireless thesis appears to involve understanding the entire wireless, fiber and cable infrastructure of America. Deep breaths. I’ll get there, but it’s not happening the Friday before Labor Day.

Top 10 Weekly Transcripts in TMT by Engagement Per User

# Ticker Title
1 META Competitor Thinks Demand for AI Training Infrastructure Will Continue to Grow
2 MSFT Former Sr. Data Scientist Sees Opportunity in Improving the Dev Experience
3 GOOGL Former Unit Head Believes GOOGL Wants to Create Its Own Content and Use That as Another Touch Point
4 SNOW Customer Sees SNOW at Risk of Cost Optimizations When Spend Gets High
5 NOW Former CPO of a Customer Believes NOW Has a First Mover Advantage in Work Flow Automation With Respect to Reliability Ease of Use and Network Effect
6 CTSH Former SVP Believes the Winners in the IT Outsourcing Space Will Be Companies That Focus on Industry Solutions Rather Than Product or Geography
7 MTCH Former Sr. Product Manager Believes Tinder Can Still Be the Leader Despite Some Growth Concerns
8 PYPL Former COS Is Positive on PYPL Looking Forward
9 ADSK Industry Expert Thinks Lack of Innovation With Repeated Price Hikes Has a Lot of ADSK Customers in Europe Frustrated
10 IT CEO of a Competitor Believes IT Will Remain on a Steady Growth Arc

That GOOGL transcript caught my eye. I love “Global Head” titles, and as I may be fired at any moment I should be aware of GOOGL’s plans for content generation.

“This is public, that they’re going to move into content creation to try and ward off, partly on Amazon, but they want to create their own content and use that as another touch point. I think they want to create a short-form video platform… and then touch points on surfaces: on your touch refrigerator or on your Nest thermostat or whatever.”

Google – Global Head of Ad ROI/Measurement (Prior)

A GOOGL TikTok… and a GOOGL refrigerator? I have read many transcripts in which experts predict that the demise of TikTok is inevitable, but that doesn’t make me believe that GOOGL will be the one to crack it. Still, that’s very interesting. The tenth most-read GOOGL transcript also caught my eye, as it deals directly with my job:

“You can’t write a blog post and just say, ‘Hey, I wrote a blog post. I got text. I’m doing the SEO thing.’ The blog post has to be stellar. You have to have content in there that’s better than what else is ranking.

One of the things that I see as a habit in the SEO industry that should be broken is SEOs are not the best to write this content, the authorities are. The best SEO content, I shouldn’t be able to read it and go, “Oh, SEO was involved in this.” It should just be SEO because it’s perfectly done for a user and it hits all of the algorithm things. Google’s now looking to rank over SEOs content.

Content across the board no matter what you’re working on, whether it’s a video or a homepage or a blog post or maybe it’s a buyer’s guide, everything about the content has to be great. It just has to be great. Google is looking for the best. It’s like a race. The best race car wins. Why are they the best race car? They got all of these things that make them the best race car. That’s what you have to put into your content.”

Greenlane Search Marketing LLC – Founder (Current)

My life goal  is to create stellar content for humans, but it’s not clear if that’s also a useful business goal. This transcript provides supporting data that my life and business goals are aligned. That makes me happy!

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